Prime positioning

The $86 bln video-streaming service hit an all-time high after Comcast and AT&T warned of a fall in subscribers. Pay-TV customers cutting the cord should mean more viewers for Netflix. But even that and a recent fee hike don’t justify the firm trading at a sky-high multiple.

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Netflix on Oct. 16 reported third-quarter net income of $130 million. At 29 cents a share, it missed the consensus estimate of sell-side analysts of 32 cents a share. Revenue was $3 billion.

Total global subscribers reached 109.25 million. The company added a net 5.3 million subscribers, beating analysts’ expectations of 4.5 million, according to FactSet.

Netflix’s free cash flow for the third quarter was negative $465 million compared to negative $506 million in the same period last year and negative $608 million in this year’s second quarter. The company reaffirmed its forecast that it will burn $2 billion to $2.5 billion in cash this year.

The company said on Oct. 5 it was raising prices for its subscriptions in some of its markets.